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Rocket Pool’s vulnerability

Yesterday's tweet sparked a fiery debate, pitting members of Lido Finance against Rocket Pool. The crux of the conflict? Centralization concerns and who holds the reins of power when it comes to these platforms.

Here is some context: Ethereum is a blockchain that runs on a proof-of-stake consensus. If you want to validate transactions and reap sweet rewards, you need to lock up 32 ETH and have the hardware to launch your node. Liquid staking protocols like Lido Finance and Rocket Pool allow users to stake any amount of ETH and earn rewards without worrying about hardware maintenance. They just pool together users’ staked coins, fire up their nodes, take a slice of the rewards for themselves, and divide the rest among the participants based on their stake size. If you’re curious about similar projects, we’ve got a list for you here.

So, what’s the beef? Well, Lido’s top tech, Dmitriy Gusakov, criticized Rocket Pool for being overly centralized. According to him, Rocket Pool developers could change some important platform parameters if they felt like it. After analyzing the smart contracts, he concluded that they could potentially tweak the inflation rate or hike up fees to outrageous levels. Lido, on the other hand, doesn’t have this vulnerability. Such a backdoor in Rocket Pool’s protocol undermines the influence of their DAO and renders the value of their protocol token, RPL, practically worthless.

However, a lawyer from the Rocket Pool Community answered these accusations. He claimed that Lido's team is merely trying to gain credit for pointing out a problem that’s already publicly known. He also reminded everyone about the upcoming upgrade that’ll fix these so-called «decentralization holes».

You might also like:

What are blockchain and consensus

What is Ethereum

How to create an Ethereum (ETH) wallet

Maria Kachura
Maria Kachura

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